PSMA opposes allowing unlimited raw sugar imports

ISLAMABAD: Millers oppose a government decision to allow unlimited imports of raw sugar after massive sugarcane crop losses, an industry official said on Friday, adding the shortfall would be smaller than expected.

The government this week waived a 25 percent regulatory duty and allowed millers and traders to import raw sugar at will after estimates the 2010/11 crop would produce about 3 million tonnes of refined sugar against an annual demand of 4.2 million tonnes.

Millers estimate output at 3.6 million tonnes and say the government should set a limit in line with total demand.

“We are telling the government that there should be a limit on the import of raw sugar. It should not be more than 500,000 tonnes,” Iskandar Khan, chairman of the Pakistan Sugar Mills Association (PSMA), told Reuters.

“We are expecting 3.6 million tonnes of sugar output after flood damage and together with raw sugar import and purchases being made by the TCP, the availability will be according to our consumption,” he said. While Khan frames the issue in terms of protecting local farmers and even health issues surrounding unprocessed sugar, unlimited sugar imports would drive down domestic prices and cut into industry profits.

He said the government should specify a limit and it should be channeled through the Industry Ministry to millers according to their production last year.

The government said the Trading Corporation of Pakistan (TCP) would have no role and importers would decide the quantity and timing of purchases.

Khan said raw sugar should reach the country within three months to enable millers to refine it by the end of February, the end of the crushing season, which starts in late November this year.

PSMA’s Khan and a government official said that imported white sugar included shipment from India, Pakistan’s first purchase from the neighbouring country after a three-year gap.

“MV Orbit carrying 30,000 tonnes of sugar from India reached Pakistan on September 22,” the government official said, speaking anonymously because he wasn’t authorised to speak with the press, adding that another ship, the “Unicorn Brave,” that was due the same day also carried Indian sugar.

source: reuters